CONSTRUCTION FORECAST | What will the second half of 2016 hold?

CONSTRUCTION FORECAST

What will the second half of 2016 hold?

The last 12 months as seen a rapid change in focus for many within the construction industry. From the resources boom, many have moved into the commercial, and residential market. However, within the industry, there are predictions of a surplus in the inner city Brisbane market leaving the potential for a market drop due to an oversupply of 27,000 dwellings next year.

Driving the reduction in residential construction is Queensland’s population growth which is projected to continue at 2.0 per cent per annum. This rate is slightly lower than has been experienced historically, would result in approximately 40,000 new households each year.

Within South East Queensland, it is predicted that the market will slow in the later part of the year with the Gold Coast being the exception.

Like Brisbane, growth in the Gold Coast has been led by investor-driven multi-unit developments and buoyant employment growth. Coupled with large-scale infrastructure projects which will continue as the venue development for the 2018 Commonwealth Games gains ground and the second stage of the light rail network gets underway.

Electrogroup CEO, Glenn Porter, believes a big part of weathering the storm is diversity. “We are seeing a significant turn from the residential investor market towards the owner occupier area in Brisbane. And with this people are looking for stronger teams that they keep on longer than just one project.

By keeping an Apprentice on longer, costs are reduced for areas such as inductions. They also learn the culture of the company and become a part of the host company’s team.

Managing the costs of projects and ensuring profit is becoming more of a priority daily. As such, we are seeing a high demand for apprentices who are not only fulfilling that role but also taking the place of trade assistants due to lower costs” he said.

Driving cost control is also the fact that residential building work costs have risen by 4.6 per cent over the year.

According to Master Builders, over the next 12 months, the health and aged-care sectors will continue to see a demand due to an ageing population. This is also propelled by the Queensland government’s investment in hospital infrastructure.

Additionally, the Australian Financial Review reported that as many as 76,000 new residential aged care places will be required by 2023-24 to meet demand.

The tourism arena is also set to bolster the Queensland economy with hotels and resorts making up nearly half of the commercial projects in planning with $22.9 billion of work in the pipeline.

Australian Construction Industry Forum has suggested that the dollar value of construction work done on major resource projects throughout Australia could drop from a forecast $38.6 billion in the current financial year to $21.5 billion in 2019/20, further enforcing resources workers need to diversify their skills.

Data from the Australian Bureau of Statistics estimates the overall number of people employed in Australia’s mining sector to be down by more than 50,000 compared with the height of the boom in May 2012.

“Within the training arena what we are seeing is a transition from resources to civil infrastructure projects, and obviously, with that timing is going to be everything. Candidates are looking to upskill so that their resume jumps out, particularly in more senior or supervisor roles.

Electrogroup also sees a focus on renewables training with the amount of solar farm development approvals across Queensland and New South Wales” said Mr Porter.

Recently The Climate Council has predicted that the residential battery storage market has the potential to grow to $24 billion within Australia. The possibility of the renewables market to boom in Queensland is further enforced by State Government’s target of one million rooftops or 3000 megawatts of solar photovoltaics (PV) in Queensland by 2020.

“We have seen what could be the game changer for power consumers and with that, as part of the industry, we have to change our approach. As such Electrogroup now offer a Certificate IV in Electrical – Photovoltaic systems and currently developing an off-grid course aimed at Electricians” said Mr Porter.

And the demand for solar in Queensland will continue to grow. Recently the State Government released figures showing that rooftop solar panels now had a similar capacity to the Gladstone power station, the state’s biggest power plant and has one of the highest penetration rates of rooftop photovoltaic panels in the world.